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For investors drooling over the possibility that Sprint Nextel (NYS: S) might become a serious national wireless competitor again, two things have to happen to bring their hopes to life. First, AT&T's (NYS: T) proposal to acquire T-Mobile has to die. That just may happen now that the Department of Justice has filed an antitrust lawsuit to halt that deal.

The second necessity is for LightSquared, the LTE network-provider, to finally satisfy the Federal Communications Commission that its wireless spectrum does not interfere with GPS receivers. Sprint had just signed a 15-year, $9 billion deal with LightSquared to provide it with 4G spectrum hosting, a service that Sprint must have to compete with AT&T and Verizon (NYS: VZ) in the future.

The GPS industry fears that LightSquared's high-powered signals will drown out the relatively weak GPS signals and create havoc among GPS users, including the aviation industry. The FCC won't allow LightSquared to turn on its network until it is satisfied that there are no interference problems.

A solution?An end to the LightSquared standoff may be at hand, according to LightSquared Executive Vice President Martin Harriman. Yesterday he said: "We have made some big concessions ... I expect there to be a resolution in the next month." LightSquared's proposal includes only using a smaller portion of its spectrum and limiting the power of its ground base stations. LightSquared would also need to develop a filter to be used by the more sensitive precision GPS receivers.

The stakes are highSprint had been counting on using Clearwire (NAS: CLWR) as its 4G broadband provider, but Its WiMAX service hasn't quite lived up to expectations. This not only reinforces Sprint's need to get the LightSquared bottleneck cleared up, but it also points to another problem that Sprint has to deal with: what to do with Clearwire, of which it owns a majority. Clearwire has announced that it will build its own LTE network, but it will need to raise $600 million to do so. So far, no takers.

Sprint looks to be in a more promising position than it was when I wrote about it last month. But even if all of the above does work out, Sprint will still have a way to go to get back to profitability.

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